Housing Innovations Fund (HIF)

The Housing Innovations Fund (HIF) is a state funded program for non-profit developers to create and preserve affordable rental housing for special needs populations.

HIF provides funding for the production and preservation of alternative forms of affordable housing. HIF projects may include, but are not limited to supportive housing for veterans, elders and others; single person occupancy (SPO) units; limited equity cooperatives; transitional and permanent housing for formerly homeless households; and housing for survivors of domestic violence.

Eligible Applicants

Non-profit corporations organized under M.G.L. c. 180; must also provide documentation of 501(c)(3) status under the Internal Revenue Code at the time of loan closing. In order to qualify as a Non‑Profit Corporation, no member, shareholder, officer or employee of such corporation or its board of directors may profit, directly or indirectly, from the HIF assistance or from the Eligible Project. In addition, in order to qualify as a Non‑Profit Corporation for purposes of the HIF program, DHCD must determine that a corporation is capable of managing all of its responsibilities in connection with the proposed project. Other eligible applicants include limited equity cooperative corporations organized under M.G.L. c.157B; a single purpose owner corporation controlled by a non-profit; and a joint venture partnership with at least 51% ownership by a non-profit.

Eligible Activities and Affordability Requirements

HIF monies can be used for the acquisition and/or rehabilitation of existing structures for rental use, or for the new construction of rental projects. At least 50% of the occupants of HIF-supported housing must be persons whose incomes are at or below 80% of area median income as determined by HUD. Additionally, at least 25% of occupants must be persons whose incomes are at or below 30% of area median income.

Funding Limits

Loans are limited to not more than 50% of the total development costs, with a maximum HIF loan of $1,000,000.

Loan Terms

In general, HIF monies are structured as a 30-year deferred payment loan at 0% interest, with ten-year extensions available at DHCD’s discretion. DHCD reserves the right to structure the loan with an interest rate above 0% to any HIF loan.

Loans are issued with a Use Restriction, recorded in the registry of deeds, providing that the land will be used for the purpose of providing alternative forms of rental and ownership housing for up to 99 years. The property cannot not be released from this restriction until the balance of the principal and interest is repaid in full or until a mortgage foreclosure deed is recorded.

Selection Criteria

DHCD gives preference to projects that provide transitional and permanent housing for homeless individuals and families. Projects must be financially feasible, complying with all of the loan terms. Upon completion, projects must comply with the applicable requirements of the Massachusetts Lead Law, the State Sanitary Code and any other applicable federal, state or local statute, regulation or ordinance, including the Americans with Disabilities Act of 1990. If proposed, projects involving supportive services must demonstrate that funding for such services is secured to the extent feasible. DHCD must take due consideration of a balanced geographic plan for alternative forms of housing when issuing loans. Owners must be in good standing with all DHCD programs. The principles of sustainable development should be reflected in the project application.